Tribune May Get Last Approval Needed to Exit Bankruptcy

Tribune Co. got the final approval
it needs to emerge from almost four years of bankruptcy today as
the Federal Communications Commission granted the transfer of
broadcast licenses to new owners.

Under a procedure that didn’t require a vote by its five
commissioners, the FCC approved the license transfers and
granted waivers so Tribune could keep newspapers and nearby
television stations in five markets including New York,
according to a release from the agency. A U.S. rule generally
forbids such cross-ownership.

“We are extremely pleased with today’s action by the
FCC,” Tribune Chief Executive Officer Eddy Hartenstein said in
an e-mailed news release. “This decision will enable the
company to continue moving forward toward emergence from Chapter
11, a process we expect to complete over the course of the next
several weeks.”

Tribune holds television stations and newspapers in the
same markets under exceptions to the 1975 rule that generally
bars so-called cross-ownership. FCC Chairman Julius Genachowski
has proposed relaxing that rule.

The combinations are in Chicago -- where Tribune publishes
its namesake newspaper and opened TV station WGN in 1948 -- as
well as Hartford, Connecticut and Los Angeles, South Florida and
New York, where Tribune retained a minority stake in Newsday
when it sold the newspaper to Cablevision Systems Corp. (CVC)

Cross Ownership

In July, Tribune won approval for a bankruptcy plan that
would give control of the company to its senior lenders,
including JPMorgan and hedge funds Oaktree Capital Management LP
and Angelo, Gordon & Co.

Aurelius Capital Management LP and other, lower-ranking
creditors filed an appeal, trying to overturn that decision by
U.S. Bankruptcy Judge Kevin Carey. As part of that effort
Aurelius tried unsuccessfully to block Tribune from leaving
bankruptcy while the appeal went forward.

That appeal is still on file, although both sides said
previously in court that once Tribune leaves bankruptcy, the
appeal is unlikely to disrupt how the ownership will be divided
or change the company’s future.

Bankruptcy Appeals

Often, bankruptcy appeals are dropped after a company exits
court protection because it can be difficult to reverse many of
the actions that take place when a Chapter 11 case ends.

Aurelius and other holders of Tribune’s oldest debts
opposed Tribune’s reorganization plan and a related legal
settlement that ended some lawsuits against the senior lenders
that financed the more than $8 billion leveraged buyout of
Tribune in 2007.

Tribune, owner of the Los Angeles Times, the Chicago
Tribune, television stations and cable channels, filed for
bankruptcy in December 2008 one year after real estate
billionaire Sam Zell used borrowed money to buy out shareholders
for more than $8 billion.

Under the reorganization plan Tribune will cancel most of
the $13 billion in debt owed to creditors in return for paying
them a lesser amount of cash, ownership stakes in the new
company and the right to sue shareholders and Zell over the 2007
buyout.

Tribune officials have said the company will be able to
leave bankruptcy this year if it wins FCC approval.

The case is Tribune Co., 08-bk-13141, U.S. Bankruptcy
Court, District of Delaware (Wilmington).